Detroit Bankruptcy and the Drive Toward Dictatorship

The bankruptcy of Detroit is being widely cited in the media as a model for the use of unelected officials and bankruptcy courts to rip up agreements and impose sweeping cuts on the pensions and health benefits of public employees, not only in Detroit, but in cities across the United States.

The Obama administration has rejected any federal aid to ameliorate the financial crisis of Detroit and counter the effort of state and city officials, fronting for the banks and bondholders, to use bankruptcy to gut workers’ benefits. This makes it clear that the Detroit bankruptcy is part of a broader nationwide policy that is being coordinated by the White House.

The attack on public workers is increasingly accompanied by claims that the crisis of Detroit demonstrates the unviability of democratic procedures, including elections. The financial collapse of the former center of global auto production is not, according to multiple commentators, an expression of the decay of American capitalism, but rather of a “failure of governance,” which can be reversed only by more authoritarian forms of rule and more direct political control by the banks and corporations.

The ruling class is well aware that its economic policies will provoke mass social opposition. It is preparing to meet this threat by means of repression and violence.

The current issue of Time magazine features a front-page photo of Detroit’s Renaissance Center with the headline “Is Your City Next?” The magazine notes that the bankruptcy of Detroit “will bring many changes in the way local governments function and cities grow.”